By Spencer Williams | September 28, 2026
Americans change jobs frequently. Some move for a better opportunity or a raise. Others have no choice, because their employer went bankrupt, was acquired, or restructured and eliminated their role. Whatever the reason, the result is the same: a mobile workforce that leaves a trail of retirement accounts behind it. Indeed, the average American will hold an estimated 10 jobs during a 40-year working life, according to the Employee Benefit Research Institute (EBRI).
Every one of those job changes represents a moment of risk. A participant with a modest balance in a former employer's plan has to decide what to do with it, and too often, thanks to a historic lack of seamless plan-to-plan portability, the easiest option is to prematurely cash out. When that happens across millions of workers, the retirement system springs a massive leak. How big is the leak? EBRI pegs it at $92 billion per year. Tens of billions of dollars in savings that should be compounding for decades drain out of the system early, taxed, often penalized, and rarely replaced.
The retirement services industry can best come to grips with this problem, and the solution to it, by thinking in terms of plumbing. Behind every retirement account is infrastructure that determines whether money can move from where it is (a former employer’s plan) to where it should be (a current employer’s plan). When that plumbing works, nobody notices it. When it's broken, it leaks, and as any homeowner knows, you'll pay almost anything to make the leaking stop.
How The Plumbing Has Evolved
The U.S. retirement system’s digital plan-to-plan portability infrastructure has developed in stages, and each stage has a distinct shape.
- The first is one-to-one. Service providers facilitate the transfer of a single plan balance to a single destination, typically from a prior employer’s plan to the current employer plan. Virtually no plumbing is involved here, as the transactions are typically done by paper forms and checks.
- The second is one-to-many. A technology platform connects a single source to multiple destinations. That's an improvement in reach, but the flow still runs through one hub, in one direction, for one party's benefit. While there is plumbing for this structure, it’s plumbing that facilitates the movement of plan assets to rollover IRAs.
- The third is many-to-many. Many sources connect to many destinations, and money can flow in every direction across the digital network. This requires fundamentally different plumbing, and it's what a true clearinghouse is built to provide.
The word “clearinghouse” has become fashionable. But not every one-to-one or one-to-many service is a true clearinghouse, and it’s worth being precise about the attributes that define it.
A true clearinghouse is many-to-many. It connects a broad network of retirement plans and recordkeepers rather than serving as a single funnel.
A true clearinghouse is reciprocal. Participating recordkeepers and retirement plan sponsors can both send and receive savings. Assets that leave one plan for another in the network can just as readily come back the other way when a worker moves again. That reciprocity is what turns many connections into a functioning network.
A true clearinghouse runs on shared technology and common standards, so every participant in the clearinghouse speaks the same language and the transfer process works the same way regardless of which two parties are involved.
And a true clearinghouse holds money only to move it. It does not hold assets for the purpose of earning on them or capturing them. Its only job is getting savings from origin to destination, safely and efficiently.
When those principles are in place, asset portability becomes a default. The outcomes that matter follow: preservation of savings inside the retirement system, consolidation of scattered accounts into one place, and continuity, so a worker's savings keep growing uninterrupted from one job to the next, throughout their journey to retirement.
The need for many-to-many plumbing is growing because the retirement landscape is becoming more complicated, not less. Workers today may accumulate savings across 401(k), 403(b), and 457 plans, traditional and Roth IRAs, state-sponsored auto-IRA programs, pooled employer plans, and newer vehicles like in-plan emergency savings accounts.
Each new account or contribution type potentially adds another pipe that has to connect to all the others. And with the Saver’s Match going into effect in the New Year, with millions of potential recipients, the need for data and money movement plumbing to process these contributions at scale becomes more urgent.
Proof That A Clearinghouse Works At Scale
The idea of many-to-many asset portability across the U.S. retirement system isn’t theoretical – the plumbing infrastructure has been live for several years. Auto Portability, enabled by the Portability Services Network, has been adopted by more than 23,000 plans nationwide. It is a functioning, many-to-many clearinghouse in the retirement services industry, automatically moving small balances from a former employer’s plan into a participant's active account in their new employer’s plan.
That is proof positive that the clearinghouse concept works, and works at scale.
Public and private players have spent decades in partnership building better investment options, better plan designs, and better participant engagement. All of that is undermined if savings leak out every time someone changes jobs. The mobile workforce isn't going away. The question is whether or not our retirement system’s plumbing will keep up with it.
One-to-one and one-to-many solutions have their place. But the system as a whole needs a true clearinghouse: many-to-many, reciprocal, built on shared technology, and focused solely on moving savings to where they belong. That's how we can stop the leaks, and work toward closing this country’s wealth gap, in 2027 and beyond.
